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Xiao Yanyan, Jin Shi Data
Nvidia (NVDA) delivered record-breaking sales and strong guidance on Wednesday, easing fears of an artificial intelligence bubble that have gripped the market in recent weeks.
Driven by continued surge in demand for high-end AI data center chips, the companyOctober quarter sales hit record high of $57 billion, up 62% from a year earlier, and beat the consensus estimate of analysts surveyed by FactSet.The company also raised its financial forecast for this quarter, predicting sales will reach $65 billion. Analysts had previously forecast revenue for the quarter at $62.1 billion.
Shares of the world’s most valuable listed company rose more than 6% in after-hours trading on Wednesday.
“We have entered a virtuous cycle of AI,”Nvidia CEO Jensen Huang said, “AI is penetrating every corner and handling all tasks at the same time.”
Wednesday’s results gave investors a sigh of relief.With the rise of the AI craze, Nvidia’s quarterly financial reports are regarded as some kind of “Super Bowl of finance.”The company is seen as a bellwether for the health of the technology industry and the overall market.
Yet market sentiment is particularly tense this earnings season—few company earnings can spark such anxious anticipation.
Investors have sold off large technology stocks in recent weeks, fearing that in the race to develop and operate the most powerful AI models, companies have invested too aggressively in infrastructure such as data centers and chips and will not be able to recoup their investments in the short term.
Adding to the pressure, a number of recent AI deals have used what critics call “round-robin” financing structures – when suppliers like Nvidia make large-scale capital investments in customers who buy their products.A few months ago, investors were enthusiastically pursuing such transactions, pushing up the share prices of many AI-related companies. However, this week, similar transactions between Nvidia, Microsoft, and Anthropic have aroused market vigilance.
A Bank of America survey this week showed that45% of global fund managers believe that the AI stock market bubble is one of the major risks facing the market.
The bearish operations of many well-known investors also shocked the technology market.Last week, Masayoshi Son’s SoftBank Group cleared out $5.8 billion of its Nvidia shares to invest in other AI fields; the influential billionaire venture capitalist Peter Thiel’s hedge fund also cleared $100 million worth of Nvidia holdings in the third quarter.
Earlier this month, Michael Burry, known for his accurate predictions of the bursting of the subprime mortgage bubble and cited by Michael Lewis in “The Big Short,” disclosed in regulatory filings that he was shorting the stocks of Nvidia and Palantir, a defense analysis company that heavily deploys AI.
“The cracks have been opening in the AI space over the past few weeks,” said Matt Stucky, Nvidia shareholder and head of equity portfolios at Northwestern Mutual Wealth Management Company. “Nvidia is a major beneficiary of AI spending, and market forces are pushing back increasingly hard against that spending.”
NVIDIA’s quarterly net profit reached US$31.9 billion, a year-on-year increase of 65%.Huang Renxun said that the new generation of Blackwell series graphics processors (currently the most powerful chip)Sales volume “exploded”.Data center business revenue hit a record of $51.2 billion, exceeding analysts’ expectations of $49 billion.
Nvidia’s stock price has more than doubled from a low of $90 in early April to more than $200 at the end of October, but has given back some of its gains in recent weeks due to bubble concerns.Its cumulative increase so far this year is still about 30%.
